The conventional wisdom on Judge Pollack's decision in the Merrill Lynch analyst research cases is that he dismissed the cases because the plaintiffs were not Merrill Lynch clients, and therefore could not demonstrate that they reasonably relied on the brokerage's research. Columnists for Forbes and Bloomberg continue to provide a forum for this incorrect reading of the case, which is being promoted vociferously by (surprise) attorneys representing individual Merrill Lynch clients in arbitration claims against the brokerage.
In fact, as discussed in The 10b-5 Daily here and here, Judge Pollack dismissed the cases because plaintiffs failed to establish any connection between the analyst research and the companies' financial troubles or the collapse of the overall market. In Judge Pollack's view, that is what actually caused plaintiffs' losses. But as Chico Marx once said, "who are you going to believe, me or your own eyes?" Here's the opinion again -- whether you agree with Judge Pollack or not, it's fascinating reading.Posted by Lyle Roberts at July 18, 2003 6:59 PM | TrackBack